70% of UAE residents opt to rent rather than buy a home

About 70 percent of UAE residents prefer to rent rather than buy property, despite half of them having resided in the country for five years or more, revealed a survey by UAE real estate website propertyfinder.ae

The findings come in spite of decreasing property prices in the past two years. They are also contrary to those of European counterparts such as England and Wales, where 64 percent of residents owe property and only 36 percent rent it.

The main reason for 69 percent of residents in the UAE is high prices, inability to raise necessary deposit, or inability to qualify for the loan amount required to borrow, according to the survey.

However, property enquiries on the propertyfinder.ae website are the highest they have been since 2014 as 54 percent of UAE residents are staying in the country longer than they had initially expected.

“It is clear that the want is there, but the high deposit requirements, the fees, the mortgage cap and stringent lending policies, are what’s stopping the market from maturing like its Western counterparts, and if we can overcome these points – I can really see a bright future for the UAE property transaction market,’’ propertyfinder.ae Group COO Lukman Hajje explains.

The UAE introduced a Mortgage Cap regulation in January 2014 that requires expats to pay a 25 percent minimum deposit for properties under AED 5 million ($1.3 million) and 35 percent minimum deposit for properties above AED 5 million.

The UAE’s lending policy also allows for a maximum lend of 50 percent on off-plan properties.